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Overhead Cost Variances

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Please help with answer the following question: Include at least 300 words and step by step calculations.

In analysis of overhead cost variances, what is the controllable variance and what causes it?

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Solution Summary

This solution helps with a question regarding overhead cost variances. Concepts covered in this solution include indirect material cost, indirect labor cost, rent in a factory building and quantity of indirect material. Step by step calculations are included as part of the solution. The explanation is given in around 300 words.

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Problem: In analysis of overhead cost variances, what is the controllable variance and what causes it?

Solution:
Controllable overhead variance is the difference between the actual overhead incurred and the budgeted overhead allowed for actual production. The variance over which the managers of the department can exercise control is called controllable variance.
The controllable variance can be explained by a example.
Example:
Actual TOTAL overhead incurred by the company A during May.2011 is $ 100000.
Actual ...

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